If a firm is price differentiating, then it is
A) producing a homogeneous product.
B) charging different prices to different consumers based on differences in marginal costs.
C) charging different prices based on quality.
D) charging different prices based on advertising costs.

Question

Quizplus · Accepted Answer

Price differentiation involves charging different prices to different consumers not based on differences in product cost but rather on what each consumer is willing to pay, which can be influenced by factors other than marginal costs.

If a Firm Is Price Differentiating, Then It Is